Medicaid vs Medicare
Medicare is a federal program that provides optional health care coverage to all Americans over the age of 65. Medicare is not based on financial need. Covering mostly medical care and care related to hospital stays, Medicare does not cover long-term care other than for the short term as a follow-up to a hospital stay.
Medicaid on the other hand is also a federal program, but also a state program. It also provides health insurance benefits to those over 65, but strict income and asset guidelines must be met. Medicaid will cover long-term care if the guidelines are met.
Does Medicaid Pay for Nursing Homes?
The short answer is yes, Medicaid does pay for nursing home care for people who meet the financial requirements of the particular program. These requirements will vary by state, could change based upon marital status. But if you do qualify, Medicaid will pay for complete costs, including room and board for an ongoing, long-term basis, for as long as it is needed.
How Much will Medicaid Pay
When it comes to nursing home care, Medicaid will pay 100% of the costs for those eligible: room, meals, medical supplies. But there is a catch, the resident must give up nearly all of their income they receive to Medicaid, keeping only a small allowance for personal needs. The exact amount will vary by state.
Example for Florida Resident? In 2022, the income limit for an individual under Medicaid care is $2,523 per month. Their personal allowance is $130. So if they earn $2,000 a month, they are eligible for Medicaid, but they would have to give the state $1,870 of the $2,000 monthly income ($2,000 income - $120 allowance = $1,870 remit to state.) Now if they have a medical bill in a particular month, that cost can be deducted from the income before calculating remittance.
NOTE: there are spousal protection laws in place to protect the assets and income of a spouse not currently covered by Medicaid.
Financial Eligibility Requirements
Chart from MedicaidPlanningAssistance.org
|2022 Medicaid Nursing Home Care Eligibility Requirements (approximate, rules vary by state)
|Married (both spouses applying)
|Married (one spouse applying)
|$2,523 / month
|$2,000 in “countable assets”
|$5,046 / month ($2,523 / month per spouse)
|$4,000 ($2,000 per spouse) in “countable assets”
|$2,523 / month for applicant
|$2,000 for applicant & $137,400 for non-applicant in “countable ass
Level of Care
While it would seem obvious, the Nursing Home Level of Care requirements are going to vary greatly from state to state. What you need to ask yourself is
- What would happen to them if they were left alone for several hours.
- Are they a danger to themselves? Why? Are the two related?
- Do they have challenges due to Alzheimer's or dementia?
- Can they complete Activities of Daily Living?
If your loved one has any two of these issues, they would most likely qualify for care.
What if I Make Too Much Money?
Sometimes the person makes more than the pay limit. There are a couple of ways to lower that income called Spend Down. The first is through medical bills, which are deducted from income. The other is through the use of a qualified income trust, also called a Miller Trust. These trusts are irrevocable meaning they can't be changed or canceled and the money can only be used for a very specific purpose, such as paying the cost of nursing home care.
What if I have too Many Assets
There are also opportunities to Spend Down the assets. But before doing so, consult with an Elder Care attorney because there is a 60 month (5 years) look-back period and limits on how you can spend it. A few ways of Spending Down Assets would include paying off debt or buying needed medical devices that are not covered by insurance.
Do all Places Accept Medicaid.
Some communities do accept Medicaid residents but have a limited number of beds or rooms that are available. Often they will require a room to be shared with another. The reason for this is a matter of economics because on average the private pay person will often pay 25% more than the Medicaid patient.
What if I Need Help
The best online resource we have found is www.MedicaidPlanningAssistance.org from the American Council on Aging. This site has a number of guides that break it down into easily understood sections and they also have resources that can help.